Anti-dumping a heating-up campaign, why?
(peopledaily.com.cn)
Updated: 2004-04-10 11:01

Dumping and anti-dumping cases can be dated back to very early days in international trade. However, for a long time, very few cases of repelling imports through anti-dumping actions took place. This situation continued until 1950s when more anti-dumping cases began to take shape.From January 1, 1995 to June 30, 2003, the period witnessed 2284 anti-dumping investigations launched by the WTO members.

Dumping and anti-dumping cases can be dated back to very early days in international trade. However, for a long time, very few cases of repelling imports through anti-dumping actions took place. A country might launch two or three such cases at the most in a year.

This situation continued until 1950s when more anti-dumping cases began to take shape. Statistics by then Ministry of International Trade and Industry (now Ministry of Economy, Trade and Industry) of Japan recorded an annual average of 30 international anti-dumping lawsuits in 1950s and 1960s, about 40 in 1970s, and a surge to 174 in 1980s.

From January 1, 1995 to June 30, 2003, the period witnessed 2284 anti-dumping investigations launched by the WTO members.

Frequently being put under anti-dumping scrutiny, developing countries and regions began to take up anti-dumping actions to counterattack the brunt to their own local industries brought about by unfair trade.

India, Argentina, Brazil and South Africa are typical examples in this aspect. From January 1995 to June 2003, developing countries and regions launched more than half of the anti-dumping investigations. India led the world with its 344 attempts, exceeding the US 308 cases.

On the other hand, the developed world generally also intensified their anti-dumping campaign. Take the US for instance, in 2001, the US launched up to 74 anti-dumping investigations as against its 14 cases in 1995. Products involved in the cases were mostly labor-intensive ones, such as metal and metal products, chemical product, mechanical and electrical products, and textiles.

There is fundamental background against which anti-dumping lawsuit is resorted to in the age of economic globalization. As the international industries are further restructured and resources are mobilized around the world in an optimized way, many used-to-be labor intensive industries have been gradually transferred to the developing countries from the developed.

However, the labor-intensive industries still in the hands of developed countries will be unavoidably hit by products from developing countries of relatively lower labor costs. When they are in the disadvantageous position in the competition, they resort to anti-dumping, a means of protectionism, rather than restructuring their industries.

In the meantime, some developing countries tend to support anti-dumping lawsuits filed by their domestic businesses because they bear a sentiment of natural repulsion against exotic competitors to keep their industries away from import challenges.

Lowered tariff barriers also make anti-dumping actions an ideal policy to protect domestic industries. When tariffs are reduced with the founding of WTO, it is unlikely to protect domestic industries with tariff barriers.

In addition, tariff reduction is binding to all parties involved and no one is allowed to increase its tariffs at will. But an anti-dumping case is a unilateral action which means the import country has discretionary power and impose anti-dumping taxes generally higher than import taxes.

In this case, a surge of neo-protectionism with non-tariff barriers as its hallmark keeps gathering momentum when tariff barriers can function not as effectively as it used to and unbalanced bilateral trade is getting more serious. As a result, anti-dumping actions increasingly become one of the major ways for nations to take up in protection of their local industries.

Chinese exports have been exposed to anti-dumping cases by other countries since the EU launched an anti-dumping investigation on China's saccharin exports in 1979. By February 2004, foreign countries have filed as many as more than 610 anti-dumping lawsuits against Chinese products, which have affected over USD 10 billion worth of Chinese exports.

The WTO defines that a dumping case is a trade behavior in which a country market its products in another at a price lower than their normal value, thus bringing damage to related industry in the import country.

There are two sets of criteria for "normal values". For market economy countries, normal values are based on comparisons with prices in the domestic market of the export countries. For non-market economy countries, prices in a substitute country or a third country (region) are referred to.

However, the problem is that the substitute countries (regions) are chosen more at random. For example, in the case of the EU anti-dumping action against Chinese videotapes, the EU Commission initially ruled the prices in the EU market were the right value Chinese products should have been priced at. But later prices in Hong Kong market were used as reference. There was up to about 100 percent disparity in dumping margin when different references were adopted.

This liberty in the anti-dumping ruling process is one of the reasons that the anti-dumping probes against Chinese products have soared up recently on one hand and China stands very little chance of winning these cases on the other.

What's more, this situation would possibly betray a wrong impression that to win an anti-dumping lawsuit against China is quite easy. Then more countries would climb the bandwagon of taking such actions against China.

As regards the discrimination against China in anti-dumping polices of foreign countries, Chinese enterprises can bring the case up to the WTO dispute settlement agencies for arbitration so long as the ruling of the import country is found discriminative when an anti-dumping case is ruled and the anti-dumping taxes are imposed on them.